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May 14, 2018

Partner in $40M Saco Island project makes a side deal for adjacent building

Courtesy / CBRE|The Boulos Co.
Courtesy / CBRE|The Boulos Co.
Bernie Saulnier Jr. of Saulnier Development in Saco purchased Building 2 of The River Gate development on Saco Island for $2.595 million.
Courtesy / City of Saco
Building 2, called The River Gate, recently sold to Saco developer Bernie Saulnier for $2.6 million. Building 1 is now called Island Terrace and comprises condominium units. The area of the building indicated by the yellow awning is Unit 91, which is the building's lower floor and parking garage; Saulnier is on track to buying Unit 91 from the city. Building 3 houses Run of the Mill restaurant. Building 4, redeveloped by Chinburg Properties of Newmarket, N.H., offers 150 apartments plus commercial space. The city expects the sale of Building 7 will soon be finalized for commercial use. The Boiler House Lofts offers residential units. The Amtrak Train Station is also known as the Saco Transportation Center; it was built on the site of a demolished mill. Part of the land for Saulnier's Waters at Saco Island project is on the photo's right side.

For more information on The Waters at Saco Island

Saulnier Development has posted a YouTube video to explain the project. It also launched a website to allow the community to follow progress and make comments about the proposal.

SACO — J&B Partners LLC is in the application process for a $40 million mixed-use development proposed for the east side of Saco Island.

So it made sense for one of the partners, Bernie Saulnier Jr., to purchase an L-shaped building called The River Gate, which is also known as Building 2, across the street from the proposed development. Saulnier, a Saco resident and developer, has his office at The River Gate.

"The owner was going to put it on the market," Saulnier said. "He approached me before he did and said, 'Since you're doing something across the street and you're here, it makes sense for you to buy it.' I said, 'Let me look at the numbers,' and it did make sense."

Rivergate LLC sold the 55,160-square-foot building, at 110 Main St., to Saulnier for $2.6 million. Daniel Greenstein of CBRE|The Boulos Co. represented both seller and buyer in the deal, which closed April 13.

Rivergate LLC deemed the time right to sell The River Gate as a profitable transaction, said Greenstein. But the property never formally hit the market.

"I just spoke with a few people about it," said Greenstein.

Built in 1836, The River Gate is 95% occupied by offices and retailers, who will remain in place. That includes Gammon's HVACR & Food Equipment Repair, the Social Security Administration, Casella Waste Systems, Minuteman Press, Saco Island Deli, attorneys, counselors and more.

Old mill history

The building is located on Saco Island, which is also known as Factory Island. According to a history of the island prepared for the city by Saco Museum curator Thomas Hardiman the building was part of a cotton mill complex erected by the York Manufacturing Co., starting in the 1830s.

All of the approximately dozen mill buildings had closed by the 1980s, said Emily Roy, the city of Saco's marketing and communications specialist. The River Gate was the first to be redeveloped, in the late 1980s. The opening of the Saco Transportation Center on the outskirts of the complex contributed to today's resurgence of the other buildings, she said.

"It's got good bones," Saulnier said of The River Gate. "That's what I liked about it. It's a little outdated, but we have a lot of great tenants in there. That gave me the confidence to buy it."

Some upgrades are in the works. That includes new signage, paving and striping the parking lot, new paint, new lighting with LEDs and a new HVAC system. The bathrooms will be remodeled.

"We're feeding off the boiler and cooling tower that comes from another building, and the system is now on its last legs, so we'll do heat pumps and split systems," he said. "Basically, the building has great potential, but the potential hasn't been developed."

For example?

"No one spent money on a good directory to help people get into and out of building easier," Saulnier said. "We'll pick projects every year."

Investment for upgrades is expected to be $200,000 to $300,000 over the next couple of years. Saulnier obtained loan financing for the property's purchase through TD Bank.

Another mill purchase coming

Courtesy / CBRE | The Boulos Co.
Courtesy / CBRE | The Boulos Co.
Building 2 is the L-shaped building with the green awnings in this photo’s lower center.

Saulnier said he's now also looking to purchase from the city Unit 91, which is a portion of the mill building that extends off the back of The River Gate. Unit 91 was acquired by the city in 2016 in lieu of unpaid taxes.

The unit includes the lower floor and parking garage of the mill. The rest of that building, which comprises condominiums, is owned by the Island Terrace Owners Association.

Roy said the city is on track to finalizing the sale to Saulnier. Saulnier said he'd like to do renovations there for mixed-use residential and commercial.

East side development on tap

Courtesy / Saulnier Development
Courtesy / Saulnier Development
The Waters at Saco Island project includes condominiums, retail space, a hotel, restaurant, marinas and river walk.

In the meantime, J&B Partners LLC's $40 million development for the east side of Saco Island is scheduled to go before the Saco Planning Board, which has rescheduled to June 5 a meeting that had been planned for May 15.

The application is for a development, to be called The Waters at Saco Island, that will feature 92 condominiums, 10,000 square feet of retail space, a 50-room boutique hotel a restaurant and two small marinas. The company is partnering with developer Jim Brady on the hotel.

Brady's previous projects in Maine include the Press Hotel in Portland.

If the planning board approvals go through, said Saulnier, "We will then engage our architects, structural engineers and the entire team to get everything ready to file for building permits, which would take probably three months. Then we'll engage to wrap up our financing and partnership. We hope to start construction in the fall."

The first phase of construction involves the hotel, the first of two residential buildings and the marina. Construction of the second residential building will begin once it's clear that units from the first building are absorbed by the market, he said. Financing for the development, initially, has been mostly through Saulnier's personal funds.

"I'll be putting in more personal cash, then doing financing with Northern Bank in Massachusetts and probably TD Bank out of Portland," he said. "We'll probably also bring in an equity partner."

J&B Partners LLC purchased the 5.84 acres, which also has an address of 110 Main St., in August 2017 for $1.5 million from Saco Island East LLC.

Heart of the community

Saulnier heads Saulnier Development in Saco. Saulnier Development has offices in Maine and Massachusetts and its projects range from renovations of historic mills to loft condominiums and custom multi-million dollar residential construction. His team includes architect David Lloyd and engineer Stephen Bushey.

Last September, Saulnier told Mainebiz that the hotel is planned for an upscale market, with rooms expected to be in the high $200 to low $300 per night. The residential condominium units will also be on the upscale side, with prices expected to start in the high $200,000s and average $300,000 to $450,000. Perks will include sweeping river views, underground parking and elevators.

Saulnier said he's received positive comments on the development.

"Right now, the abutting residents seem excited to know there's going to be, for the first time, some public access to the river, where the community can finally go down on the weekend, go kayaking or fishing, or walking the river walk that's going to be built," he said.

Roy said the city is glad to see that Saulnier, as a Saco resident and businessman, has become part of the mill district's resurgence.

"The mill district is the heart of the two communities' downtowns," Roy said, speaking of Saco and Biddeford. "The properties on the island have shifted hands and evolved through the years, but it seems to have come into focus now, and we're really excited about that."

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